SUCCESSION PLAN OUTLINE

By Jerry Butler

I. DETERMINE AND MONITOR BUSINESS VALUE
> Formal look at the business
> Overview of transition risk
> Is business positioned for growth, maintain or declining revenues
> Overview of what is happening in the Industry and similar financial advice businesses

II. EVALUATION OF THE BUSINESS
⮚ “As nouns, the difference between valuation and evaluation is that valuation is an estimation of an object’s worth, while an evaluation is an assessment, such as an annual personnel performance review used as the basis for a salary increase or bonus, or a summary of a particular situation.”
⮚ Evaluation allows for “bookmarking” comparing financials to similar businesses to identify if revenue and expenses are in line.
⮚ An evaluation is going to look at a business in relation to strengths and weaknesses
⮚ The business’ structure and the business model is an important consideration when designing a succession plan
⮚ An evaluation is going to identify those value drivers that need improvement in order to adjust the business to be ready for a transition
⮚ The evaluation process is designed to create an action plan to prepare the business for a merger, a sale and/or an exit strategy

III. CREATE A SUCCESSION PLAN
⮚ Time frame
⮚ Define Owner’s Lifestyle plan
⮚ Plan should be specific but flexible
⮚ Does the business need to be adjusted – corporate, partnership, associates, etc.
⮚ Define the Transition Strategy – minimize transition risk with clients / employees / etc.
⮚ Define the Financial Terms expected
⮚ Define the transfer ownership – in specific tranches, flexible over time or 100%
⮚ Exit Strategy

IV. STRATEGIC BUSINESS PLAN
⮚ Based on the above – Strategies are defined
⮚ Tactical Plan is designed to accomplish the strategies
⮚ Monitor and Adjust program

V. PROTECT THE BUSINESS
> Continuation Plan
> Buy /Sell – Shareholder’s Agreement – Etc.